MINUTES OF THE
SENATE Committee on Finance
Seventy-First Session
June 1, 2001
The Senate Committee on Financewas called to order by Chairman William J. Raggio at 8:27 a.m., on Friday, June 1, 2001, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Lawrence E. Jacobsen
Senator William R. O’Donnell
Senator Joseph M. Neal Jr.
Senator Bob Coffin
Senator Bernice Mathews
GUEST LEGISLATORS PRESENT:
Assemblywoman Bonnie L. Parnell, Assembly District No. 40, Carson City
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
Mindy Braun, Education Program Analyst
Georgia J. Rohrs, Program Analyst
Rick Combs, Program Analyst
ElizaBeth Root, Committee Secretary
OTHERS PRESENT:
Michael D. Hillerby, Deputy Chief of Staff, Legislative Affairs, Office of the Governor
Michael J. Willden, Administrator, Welfare Division, Department of Human Resources
Wayne R. Perock, Administrator, Division of State Parks, State Department of Conservation and Natural Resources
Steve Robinson, State Forester Firewarden, Division of Forestry, State Department of Conservation and Natural Resources
David Pursell, Executive Director, Department of Taxation
John P. Comeaux, Director, Department of Administration
Yvonne Sylva, Administrator, Health Division, Department of Human Resources
Robin Keith, Lobbyist, Nevada Rural Hospital Project Foundation
H. Pepper Sturm, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau
Dotty L. Merrill, Lobbyist, Washoe County School District
Douglas Byington, Lobbyist, Nevada Association of School Administrators
Nancy A. Dunn, Interim Executive Director and Business Manager, Commission on Tourism
Chairman Raggio:
The first bill we will be hearing this morning is Senate Bill (S.B.) 292. Committee staff has a proposed Amendment 1174 to this bill.
SENATE BILL 292: Revises provisions governing charter schools and authorizes programs of distance education. (BDR 34-382)
SENATOR NEAL MOVED TO AMEND AND DO PASS S.B. 292.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O’DONNELL WAS ABSENT FOR THE VOTE.)
*****
Chairman Raggio:
Next, to accommodate Assemblywoman Parnell, let us take up Assembly Bill (A.B.) 209.
ASSEMBLY BILL 209: Makes appropriation to Welfare Division of Department of Human Resources to increase temporarily population, which is eligible to qualify for assistance from Low-Income Home Energy Assistance Program. (BDR S-979)
Assemblywoman Bonnie L. Parnell, Assembly District No. 40, Carson City:
I urge your support of A.B. 209, which appropriates $4 million as a supplement to the existing federal low-income home energy assistance program. This additional $4 million would ensure that assistance is available for a greater number of our most needy.
With the sudden and sharp increase in energy prices, I fear that many of our low‑income citizens are finding themselves unable to pay their gas and electric bills. The committee has my handout entitled, “Survey: Five Million Homes Need Help Paying Fuel Bills” (Exhibit C).
The Department of Energy estimates that heating prices this winter are about 40 percent higher than last winter and natural gas prices are about 70 percent higher. This leaves many of our most vulnerable “falling through the cracks.” With the early heat we are experiencing, I am concerned about our elderly citizens.
In watching the news this morning, I became even more alarmed when it was reported that Las Vegas has just experienced its warmest May on record. Members of this committee who do not live in the North would have to concur that this past May has been the warmest I can remember in a long time.
During our election campaigns, many of us spoke of the dilemma of people having to choose between putting food on the table and finding prescription drugs in their medicine cabinet. Considering that equation, what concerns me is that we now have a new factor, which is the increasing cost of energy and gasoline. It is for these reasons we are here this morning to urge this committee to consider A.B. 209 and the appropriation of an additional $4 million, so that we can ensure those who qualify for assistance, may receive the money available to help them out.
Senator Rawson:
In looking at the handout (Exhibit C), I wonder why the federal allotments in Nevada are low. There are other small states. Although we are not in the cold belt, a good part of Nevada is in the cold belt and there is no question Nevada is as hot in the summer as any other state.
Assemblywoman Parnell:
When I was studying this issue, I was alarmed by the information on the chart (Exhibit C, page 3) that the only state receiving less than Nevada in federal funding for the Low Income Home Energy Assistance Program (LIHEA) is Hawaii. I do not think anyone could compare our weather extremes, northern in the winter and southern in the summer, with a state like Hawaii.
I am hoping this legislature urges the federal government to address the issues of heating and cooling in our state and does whatever can be accomplished to obtain additional funds for Nevadans. The President of the United States has made a statement about placing more money into federal assistance programs. Through that, Nevada may experience a slight increase in allotments for the needy.
Senator Rawson:
If we process this bill, we need to add language that directs our Congressional delegation to pursue that. They may or may not be able to do anything about this, but we need to pursue it.
Assemblywoman Parnell:
I agree completely, Senator. Thank you.
Michael D. Hillerby, Deputy Chief of Staff, Legislative Affairs, Office of the Governor:
In the Governor’s State of the State address, he suggested we consider adding as much as $5 million to the LIHEA program. Assemblywoman Parnell approached the Governor’s office early. She introduced a bill to accomplish a similar function. The Governor is happy to support this bill. In trying to balance the budget, that proposal has been reduced from $5 million to $4 million because there are many needs in this state.
Assemblywoman Parnell raised important concerns, particularly regarding senior citizens. We have included language that allows the eligibility requirements to be waived in emergency situations, such as if a person is caring for a sick relative, spouse, or other kinds of special situations where people may find themselves in immediate danger. The Governor’s office is hopeful this will enable us to help people who are at or below the 150 percent of the poverty level. The Governor’s office will closely monitor this over the biennium, and by the next legislative session it hopes to propose how to help even more people and protect those people “falling through the cracks.” The Governor is very pleased to support this bill.
Chairman Raggio:
How will this revenue be allocated? What kind of grants will there be? What will the eligibility requirements be? What do you anticipate?
Michael J. Willden, Administrator, Welfare Division, Department of Human Resources:
This appropriation will allow our agency to increase the number of people we serve, which is currently about 10,000 a year. This $4 million would give the division $2 million each year of the biennium to add about 6,600 additional eligible individuals or families.
The Welfare Division is currently adopting new regulations to make the low-income energy program a year-round program. Currently, the program is operating 8 months a year. The agency’s focus will be on the southern part of Nevada to address cooling costs. To answer Senator Rawson’s question in greater detail, the federal formula has a heavy bias towards heating costs, not cooling costs. Our agency has lobbied for several years, and will continue to lobby to change that formula.
The division is also adopting regulations to allow families to split their payments between summer cooling costs and winter heating bills so they may choose which bill to use their money on. We would be pleased to get the additional appropriation. If you chose to approve this bill, we will match that revenue with federal funding and stretch those dollars as far as we can.
Chairman Raggio:
What is the anticipated benefit range?
Mr. Willden:
The benefit range is a low of $120 for someone with higher income and less vulnerability, to a high of $630. Recipients can split it and decide whether to place it on their gas, electric or propane bill. At this time, the average payment is about $250. The agency is making supplemental payments because of higher utility costs. We anticipate the average payment for this program will end up around $304 per household.
Senator Coffin:
Where is the population that is expected to benefit from this additional revenue?
Mr. Willden:
With additional funding, more of our outreach will go primarily towards southern Nevada. The program’s concern at this time will be the cooling costs of this summer. We are gearing up to opening the program year-round and not just having a “crisis program” for the southern cooling, but a full-time cooling and heating program.
Senator Coffin:
How does this bill relate to A.B. 349?
Mr. Willden:
A.B. 349 is “dead,” but there may be an amendment being processed to A.B. 661 that may contain pertinent sections of A.B. 349. Assemblyman Goldwater has proposed a mill tax and, if that mill tax is approved, that would generate between $8 million to $10 million for the low-income energy assistance program. That money would also be placed in the low-income energy pool and used with these funds and federal funding, and we would be able to further expand the number of people we serve.
ASSEMBLY BILL 349: Establishes universal energy charge to fund low-income energy assistance and conservation. (BDR 58-1264)
ASSEMBLY BILL 661: Revises and repeals various provisions concerning utilities and energy. (BDR 58-1128)
Senator Coffin:
Let me understand this properly. We have a guaranteed federal grant; we have potentially more federal funding; we have A.B. 349, which will generate funding; and then, we have the General Fund appropriation, all of which will increase the revenue for this program.
Assemblywoman Parnell:
Actually, Assemblyman Goldwater and I spoke at length at the beginning of the session because we both had an interest in addressing this population. I was so concerned about the sudden sharp increase in energy costs that I felt it imperative to immediately address the situation. My bill is for a “one-shot” appropriation for temporary assistance to supplement the existing program. The bill contains a sunset provision in 2003. I felt that was important.
Assemblyman Goldwater’s idea was to factor in a program that had a long-term funding mechanism going far beyond the 2-year period of the appropriation before this committee. That is one major difference between the two bills.
Senator Coffin:
So, as you were devising this bill, the philosophy was that one or the other could be processed for this biennium. However, S.B. 349 was the long-term approach.
Assemblywoman Parnell:
That is correct, Senator.
Senator Neal:
What was the basis for the $4 million amount?
Mr. Hillerby:
The Governor considered all of the available state resources, the amount of available federal revenue generated and, working with Mr. Willden, came up with the $4 million figure. There is no particular magic formula or answer to your inquiry. When the Governor and Assemblywoman Parnell discussed the issue of utility costs, energy prices were clearly increasing. At the time, it appeared an unlimited amount of revenue would be needed for this program given there is a large potential population needing this program. However, Nevada has limited resources, and the arrived at amount of $4 million was considered to be a reasonable appropriation request.
Senator Neal:
Otherwise do you know whether the $4 million will last one month, two months or whatever?
Mr. Willden:
If I could respond to that question by giving you statistics, that might bring your inquiry into focus. The U.S. Census Bureau estimates there are about 140,000 households below 150 percent of the poverty level, which is the target population of this program. The current federal funding allows the Welfare Division to serve only around 10,000 families. The last time this state was in an energy crisis was in 1991-1992 after the Gulf War. At that time, our peak number of applications was about 16,800. Our most critical focus was to be able to reach the 16,000 to 17,000 households. With additional outreach, there are estimates we would see 35,000 to 40,000 applications.
Senator Neal:
How will the revenue be dispensed?
Mr. Willden:
When an applicant applies to the Welfare Division and the division determines them to be eligible, we place a credit on their energy bill. The applicant chooses the energy bill they wish us to put the credit on, whether it is electric, gas, propane, fuel oil, or even firewood. Then the division places a credit on the applicant’s account through the energy provider. We do not issue payments to the household, except in rare circumstances.
Senator Neal:
How do you determine the amount of credit dispensed?
Mr. Willden:
The agency has a formula matrix that is based on the family’s income. A family receives more points for having lower income and fewer points for higher income. Additionally, each household obtains points for its fuel source. At the moment, propane is the most expensive fuel source, next comes electricity, and gas is the least expense in this group. Beyond that, a household gets additional points in the event there are “vulnerable individuals” in the household, such as the elderly and very young. Each point is $30 in the current formula, so the household can obtain no more than 21 points, depending on the circumstances.
Chairman Raggio:
At this time we will close the hearing on A.B. 209 and open the hearing on A.B. 505.
ASSEMBLY BILL 505: Makes appropriation to State Department of Conservation and Natural Resources for replacement equipment for Division of State Parks. (BDR S-1390)
Wayne R. Perock, Administrator, Division of State Parks, State Department of Conservation and Natural Resources:
I submitted a handout entitled, “AB-505 (Replacement equipment)” (Exhibit D). This equipment is necessary for the management of the park resources and facilities. The priorities for state parks include 6 replacement vehicles, 1 used motor grader, 1 dump truck, 6 personal computers, 10 printers, 1 laptop computer, and other miscellaneous small equipment items.
The vehicles are our top priority for several reasons. Our fleet consists of 141 vehicles with an average age of 13 years. Twenty of our vehicles have over 150,000 miles. By comparison, the State Motor Pool replacement standards are 3 years and 85,000 miles.
Additionally, A.B. 505 includes one new piece of equipment for $5,000, which is a Cisco router needed in our Carson City regional office to provide a transmission (T‑1) line service as we bring the integrated financial system on line. I will be happy to answer any questions.
Chairman Raggio:
The amount in this bill has been changed to $329,107; is that correct?
Mr. Perock:
That is correct, Mr. Chairman.
Chairman Raggio:
There being no questions from the committee, we will close the hearing on A.B. 505. At this time we will open the hearing on A.B. 510.
ASSEMBLY BILL 510: Makes appropriation to Division of Forestry of State Department of Conservation and Natural Resources for equipment for suppression of forest fires. (BDR S-1397)
Steve Robinson, State Forester Firewarden, Division of Forestry, State Department of Conservation and Natural Resources:
This appropriation is for the Caliente Youth Center, which has a program going on its fourth year of operation for boys and its third year for girls. Basically, this program trains the boys and girls in firefighting. The program has been successful and these young people go through the same 40-hour training as any other firefighter.
Additionally, this bill would allow the agency to repair two crew buses for this program. These crew buses are 20 years old. We will not replace them, but we will repair them. This appropriation also gives the participants clothing and tools, which are the hand-me-downs from the adult crews.
Chairman Raggio:
I heard testimony yesterday about this program that these young people are doing an excellent job.
Mr. Robinson:
Yes, Sir. Not only are the boys and girls doing a good job, but this program helps rehabilitate these youths.
Chairman Raggio:
We will close the hearing on A.B. 510 and open the hearing on A.B. 519.
ASSEMBLY BILL 519: Makes appropriation to Department of Taxation for implementation of Phase II of Business Process Re-Engineering Project, development of document scanning and imaging system, and enhancement of Local Government Financial Reporting System. (BDR S-1429)
David Pursell, Executive Director, Department of Taxation:
Assembly Bill 519 is an appropriation for three different projects to be implemented between now and the next session of the Legislature. There is $1.3 million in this request for phase II of the Business Process Re-Engineering Project (BPRP), which is part of the agency’s computer system. Phase 1 was completed a year ago and was focused on what and how the agency was conducting business. Phase II would help the agency develop a new architecture for an integrated revenue collection system.
The $800,000 will be used to develop an imaging and scanning system that will enable the department to use electronic filing of sales tax and business returns. The agency will tie this together with electronic filing and electronic fund transfers. Nevada is the last state in the United State to have an electronic fund transfer system.
The Fiscal Analysis Division of the Legislative Counsel Bureau (LCB) put together a report of all the budget information from counties in this state. Through Senator Ann O’Connell, Clark Senatorial District No. 5, and the Senate Committee on Government Affairs, it was decided it would be a good idea to have the collection of this information handled through the Department of Taxation. The plan would be to offer the same electronic filing of those budget reports as in the past and to put a database together of pertinent information for purposes of addressing financial emergencies in counties we are experiencing in this state. The department has already been involved with emergencies experienced by the White Pine County School District, Nye County Hospital and the former City of Gabbs. This appropriation of $75,000 would assist in setting up that system at the Department of Taxation.
Chairman Raggio:
It is this committee’s understanding the $1.3 million is for the development of the new revenue management computer system, which will replace the department’s Automated Collection Enforcement System (ACES). Is that correct? That was in the Governor’s budget, correct?
Mr. Purcell:
That is correct on both counts, Mr. Chairman.
Chairman Raggio:
The $800,000 for the scanning and imaging system was recommended by the Governor, but was not included in The Executive Budget?
Mr. Purcell:
It was in our current budget and we requested to have it included in this “one‑shot” appropriation.
Chairman Raggio:
Mr. Comeaux, are you aware of that?
John P. Comeaux, Director, Department of Administration:
I am, Mr. Chairman, and it is agreeable.
Chairman Raggio:
The $75,000 would then go to the Department of Taxation under this bill. Is that for the collection and reporting of the local government financial information?
Mr. Purcell:
That is correct, Mr. Chairman.
Chairman Raggio:
There being no further questions or testimony, we will close the hearing on A.B. 519 and open the hearing on A.B. 588.
ASSEMBLY BILL 588: Makes appropriation to restore balance in emergency account. (BDR S-1510)
John P. Comeaux, Director, Department of Administration:
Assembly Bill 588 would provide an appropriation to restore the balance in the emergency account. The amount of the appropriation in the first reprint of the bill is $160,000 and it would restore the balance in the account to approximately $400,000. It has been the policy for quite some time to commence each biennium at $400,000.
Senator Jacobsen:
Mr. Comeaux, it might be beneficial if you could give the committee a quick understanding of what that account is primarily used for.
Mr. Comeaux:
Basically, the account is used for instances of threat to life or property or the imminent danger thereof. From a practical standpoint, most of it is for when the Governor calls out the Nevada National Guard Reserve for search and rescue expeditions.
Chairman Raggio:
We will close the hearing on A.B. 588 and open the hearing on A.B. 612.
ASSEMBLY BILL 612: Creates revolving loan account in state general fund to provide assistance to certain rural health programs. (BDR 31-1421)
Yvonne Sylva, Administrator, Health Division, Department of Human Resources:
Assembly Bill 612 creates a $500,000 revolving loan fund to provide loans to rural health providers. The bill also provides authority to the Director of the Department of Human Resources to adopt regulations to establish the process and criteria that would be used to fund rural health programs in a fair and equitable manner. The department has established a stakeholders group that is currently working on the regulations. One of the agenda items they have is to establish a framework for the implementation of A.B. 612.
Robin Keith, Lobbyist, Nevada Rural Hospital Project Foundation:
A.B. 612 is an opportunity to do a great deal, considering there are so few resources afforded this project. With one action, this bill can benefit a wide variety of rural health care providers such as dentists, physicians, clinics, and emergency medical services.
The Nevada Rural Hospital (NRH) project has had a program similar to this in place for a number of years. Our pool was funded with an appropriation of $400,000 obtained about 10 years ago through the Interim Finance Committee (IFC) and with a loan from the Robert Wood Johnson Foundation (RWJF).
From our perspective, an additional benefit to funding A.B. 612 is that it will replicate a program that the RWJF sees as successful, and will open the door to further the NRH project, leveraging that success into forgiveness of the loan that we owe back to the foundation. The effect of passing A.B. 612 is it will leave $500,000 to $750,000 in additional resources in this state to benefit rural providers. The appropriation for this is in the Governor’s budget as a one-time appropriation. We would encourage the Department of Human Resources to work closely with the federal Office of Rural Health in implementing this program. NRH is part of the stakeholders group, and we will be closely monitoring expenditure of funds.
Chairman Raggio:
Will this provide funding for capital expenditures for rural hospitals, equipment and things of that kind? The appropriation is a revolving loan so there is no reversion on this and it will continue.
Ms. Sylva:
That is correct on both counts, Chairman Raggio.
SENATE BILL 403: Enacts Frontier and Rural Health Care Improvement Act of 2001. (BDR S-942)
Senator Rawson:
We have had a number of issues related to rural health care that may not be able to be processed this legislative session. I wonder about S.B. 403 and whether there is language in that bill that should be placed in A.B. 612 so that we have proper statutory language in place.
Senate Bill 403 was to enact the Frontier and Rural Health Care Improvement Act of 2001 with a requested appropriation of $1.2 million. That will not likely materialize. It seems to me there was discussion regarding necessary language in that bill that was important for inclusion in bills such as A.B. 612.
Ms. Sylva:
As I recall the testimony regarding S.B. 403, particularly the testimony of Caroline Ford, Assistant Dean, University of Nevada School of Medicine and Director, Office of Rural Health, this bill had a similar revolving loan fund. Dean Ford hoped that either S.B. 403 or A.B. 612 would pass both houses of the Legislature. That is all the information I recall from the hearing on that bill.
Senator Rawson:
During that hearing the committee was establishing a number of inclusions that would allow the Legislature to develop rural health care services in the future. This committee may not have another opportunity to consider A.B. 612, and I want to ensure that essential language is included.
Ms. Keith:
The funding for S.B. 403 was important to Dean Ford, but it was equally important to her that there be a chapter created in the Nevada Revised Statute (NRS) specifically dealing with rural health care issues. Section 2 of S.B. 403 commences that process.
Chairman Raggio:
Section 3, subsection 7 was a $500,000 appropriation for a capital loan pool.
Ms. Keith:
Yes, Mr. Chairman. It was not our intent that both of these bills pass, but that this project be funded through only one of the bills. From the beginning, we were aware that one or the other would likely occur. I can safely say on behalf of Dean Ford that we would support deleting that provision in S.B. 403 in favor of A.B. 612. However, there is language in S.B. 403 that speaks directly to rural health clinics and the bill includes $70,000 of additional funding that could be folded into A.B. 612.
Senator Rawson:
Mr. Chairman, I have two concerns. One is that we develop that statutory reference, either by amending the language into this bill or stripping the appropriation out of S.B. 403, and passing S.B. 403.
My second concern is the Carlin Clinic, which will fail this year without assistance from this committee. The failure of the Carlin Clinic could be catastrophic to that area. There was a $70,000 appropriation in S.B. 403, or in an amendment to that bill, that would allow financial support for that clinic. I do not want to cut into this $500,000 appropriation in A.B. 612. However, if there is an opportunity to place $70,000 into this bill, or otherwise identify $70,000 to keep the Carlin Clinic afloat, that clinic will be able to maintain itself through this difficult period.
Senator Neal:
Why is this called a “revolving loan fund” when you would have to establish procedures whereby a person would apply for grants? A revolving loan involves a pay back, but if you have procedures developing a grant, the loan does not have to be repaid.
Ms. Keith:
This bill is intended to truly be a revolving loan pool. It is a permanent resource, and when an applicant’s loan is granted from our pool, it is an approval of a loan. That is the intent under A.B. 612. That resource is to be paid back and reloaned to the next provider.
Senator Neal:
It states in Section 1, subsection 6 (a) that regulations must include “The procedure by which a person may apply for a grant of money from the account to provide assistance to certain rural health programs.” That seems distinctive that, if a person has a grant, that person does not have to pay it back.
Ms. Sylva:
It does, indeed, appear to be a conflict. However, in Section 1, subsection 1, on line 3, it says “the revolving loan account,” although the section Senator Neal refers to indicates a “grant of money.” The intent is that this account be a revolving loan fund, not a grant.
Chairman Raggio:
Section 1, subsection 2 is clear and states, “The money in the account must be used solely to make loans to rural health programs that require such assistance.”
Ms. Sylva:
That is correct, Mr. Chairman, and that is clearly the intent of this bill.
Senator Jacobsen:
Ms. Keith, can you tell this committee what rural hospitals are in financial crisis today?
Ms. Keith:
That distinction rotates around the state depending on the economic circumstances within various industries, such as mining. At the moment the hospital in Mineral County is in desperate straits, as are the hospitals in Lovelock and Caliente, which are also in danger and financially struggling.
Senator Rawson:
To amplify that, Senate Bill 377 is in conference committee at the moment and there has been an agreement on that bill.
SENATE BILL 377: Revises provisions governing payment of hospitals for treating disproportionate share of Medicaid patients, indigent patients or other low‑income patients. (BDR 38-316)
Senator Rawson:
Essentially that bill supports more than a dozen of the rural hospitals in Nevada, with either $25,000 or $50,000 per year allotments in Medicaid “disproportionate share” funding. That may not save these hospitals, but it is support in getting financial resources to them.
Chairman Raggio:
We will close the hearing on A.B. 612 and open the hearing on A.B. 658.
ASSEMBLY BILL 658: Makes appropriations to Budget Division of Department of Administration for continuation of development and roll out of Integrated Financial System. (BDR S-1355)
John P. Comeaux, Director, Department of Administration:
I distributed a handout entitled, “AB 658: Department of Administration Integrated Financial System” (Exhibit E). Assembly Bill 658 would provide a one‑time appropriation in the amount of $11,820,380 from the General Fund and $2,664,000 from the State Highway Fund for the continuation of the development and implementation of the integrated financial system (IFS). To date, a total of $42 million has been appropriated for this project: $25.3 million from the General Fund and $16.7 million from the State Highway Fund.
In early 1999, the IFS went into production, processing all state payment of claims and payroll for central payroll agencies and the Department of Transportation. In addition, a web-based financial data warehouse was implemented to improve financial management reporting. Over the past 2 years, the project team has implemented additional business functions, including fixed asset control, custom invoicing and accounts receivable control, grants management, project and other cost accounting, and a core web-based human resource data warehouse.
Additionally, the team stabilized the system application, improved the cycle time for the payroll system, developed and provided additional user agency training, and documented personnel procedures. For the upcoming biennium, the project team plans to implement federal grants management, automated work flow, journal entries, and tracking of employee training, grievance incidents, and employee evaluations. The team will complete the system “roll out,” document the financial procedures, and expand both the financial and human resource data warehouses.
The project team is currently in contract negotiations for a time-data collection system, which would allow the larger agencies to scan time sheets, as opposed to keypunching the information into the system. The Department of Transportation has agreed to pilot this project beginning in August 2001. If successful, this will be provided to all the larger state user agencies.
By June 30, 2003, the IFS project will be complete. Although there will be on‑going maintenance and support costs in future biennia, this one-time appropriation request represents the final appropriation request for development and implementation of the system. I attached a project budget recapitulation (Exhibit E) showing that the IFS project is projected to cost approximately $795,236 less than the original projection developed in November 1996.
Chairman Raggio:
This appropriation will complete this project at the end of the biennium.
Mr. Comeaux:
That is correct, Mr. Chairman.
Chairman Raggio:
There being no further questions, we will close the hearing on A.B. 658. Committee, at this time let us look at the bills we heard this morning. The first is A.B. 209.
ASSEMBLY BILL 209: Makes appropriation to Welfare Division of Department of Human Resources to increase temporarily population, which is eligible to qualify for assistance from Low-Income Home Energy Assistance Program. (BDR S-979)
Chairman Raggio:
If there are no objections to this bill, I will take a motion to pass this bill.
SENATOR RAWSON MOVED TO DO PASS ASSEMBLY BILL 209 AND TO ISSUE A LETTER OF INTENT FROM THE SENATE COMMITTEE ON FINANCE AND THE ASSEMBLY COMMITTEE ON WAYS AND MEANS TO NEVADA CONGRESSIONAL DELEGATION TO ENCOURAGE THEIR ASSISTANCE IN INCREASING LEHEA ALLOCATIONS TO NEVADA.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
Next is A.B. 505, which I will accept a motion on.
ASSEMBLY BILL 505: Makes appropriation to State Department of Conservation and Natural Resources for replacement equipment for Division of State Parks. (BDR S-1390)
SENATOR RAWSON MOVED TO DO PASS ASSEMBLY BILL 505.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
The next bill is A.B. 510.
ASSEMBLY BILL 510: Makes appropriation to Division of Forestry of State Department of Conservation and Natural Resources for equipment for suppression of forest fires. (BDR S-1397)
SENATOR JACOBSEN MOVED TO DO PASS ASSEMBLY BILL 510.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
The next bill is A.B. 519.
ASSEMBLY BILL 519: Makes appropriation to Department of Taxation for implementation of Phase II of Business Process Re-Engineering Project, development of document scanning and imaging system, and enhancement of Local Government Financial Reporting System. (BDR S-1429)
SENATOR O’DONNELL MOVED TO DO PASS ASSEMBLY BILL 519.
SENATOR RAWSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
The next bill is A.B. 588.
ASSEMBLY BILL 588: Makes appropriation to restore balance in emergency account. (BDR S-1510)
SENATOR RAWSON MOVED TO DO PASS ASSEMBLY BILL 588.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
We will hold A.B. 612 at the request of Senator Rawson. The next bill is A.B. 658.
ASSEMBLY BILL 658: Makes appropriations to Budget Division of Department of Administration for continuation of development and roll out of Integrated Financial System. (BDR S-1355)
SENATOR RAWSON MOVED TO DO PASS ASSEMBLY BILL 658.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Senator Coffin:
Mr. Chairman, on A.B. 612, did we have questions or did we have an amendment?
ASSEMBLY BILL 612: Creates revolving loan account in state general fund to provide assistance to certain rural health programs. (BDR 31-1421)
Chairman Raggio:
There was a question of whether additional statutory language should be added or whether it was feasible to add funding to the measure at this point.
Senator Coffin:
I thought the issue was the ambiguity in the language, which could be resolved by amendment.
Chairman Raggio:
Senator Rawson’s concern was that there was language in S.B. 403 that should be included in A.B. 612.
Senator Neal:
My understanding is it was a duplication of revenue that should either be placed in A.B. 612 or S.B. 403.
Chairman Raggio:
Senator Rawson indicated that certain language should be deleted from S.B. 403 and added to A.B. 612.
Senator Rawson:
I do not want to delay matters, but there is statutory language in S.B. 403 that needs to be deleted from that bill and inserted in A.B. 612. Additionally, a $70,000 appropriation needs to be stripped from S.B. 403 and possibly placed in A.B. 612. There is consideration in S.B. 403 for the Carlin Clinic, which I am concerned about preserving.
Chairman Raggio:
The Carlin Clinic has never been funded by state revenue. What is the status of that clinic today?
Senator Rawson:
It is about $200,000 in debt and they do not have the ability to reorganize. It is a non-profit organization. Carlin is willing to infuse revenue into the clinic and Elko County is going to place funding in the clinic, as well.
Chairman Raggio:
We will hold this bill until the next meeting of the Senate Committee on Finance. Senator Rawson, please look into an amendment feasible for this measure. What is next on the agenda, Mr. Ghiggeri?
Gary L. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
The committee heard A.B. 504 yesterday.
ASSEMBLY BILL 504: Makes appropriation to State Department of Conservation and Natural Resources for State of Nevada’s share for carrying out Truckee River Operating Agreement. (BDR S-1389)
Mr. Ghiggeri:
The Assembly Committee on Ways and Means amended that bill and the appropriation was reduced from $80,000 to $70,000. Upon researching that reduction, it appears that might have been done based on erroneous information. Committee staff would suggest the amount be increased back to $80,000.
Chairman Raggio:
Committee, you will recall R. Michael Turnipseed, P.E., Director, State Department of Conservation and Natural Resources, stated the one-fifth share needed for the state in the Truckee River Operating Agreement is $80,000. I will take a motion to amend the first reprint of A.B. 504 with amendment 1181, which increases the amount to $80,000.
SENATOR RAWSON MOVED TO AMEND AND DO PASS AS AMENDED ASSEMBLY BILL 504 WITH AMENDMENT 1181.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATE BILL 148: Makes various changes regarding educational personnel. (BDR 34-219)
H. Pepper Sturm, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau:
This bill originally came from the interim Legislative Committee on Education. It contained four basic provisions, including an increased appropriation to reimburse costs of teachers acquiring certification from the National Board for Professional Teaching Standards (NBPTS). Under certain circumstances, it also authorized the licensure and employment of teachers in certain shortage areas who are not citizens. That is a provision the school districts have been eagerly requesting.
There was also an appropriation for the Regional Professional Development Programs (RPDP) and for an additional day of the school year. The amendments do affect a couple of those provisions, which Ms. Braun will discuss.
Mindy Braun, Education Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
First, if the proposed amendments are approved, all of the remaining appropriations in this bill are included in The Executive Budget and reflect the subcommittee’s closing action.
I have distributed a handout entitled, “Proposed Amendments to Senate Bill 148” (Exhibit F). The first portion of the amendment would delete Section 10 of the bill. This section authorizes a transfer from the Distributive School Account (DSA) in the amount of $14.8 million for the addition of one day to each school year of the 2001-2003 biennium for professional development of teachers. This authorization was not included in The Executive Budget.
The second portion of the amendment is Section 11, which would adjust the amount to be allocated from the DSA for reimbursement of costs of teachers related to acquiring certification by the NBPTS from $150,000 over the biennium to $150,000 in each year of the biennium.
Mr. Sturm:
The next amendment affects the RPDP and is contained in Section 1 through Section 12. Basically, this provides for formal recognition of government structures that are currently in place with the regional professional development centers. The first of these provides for the establishment of a statewide RPDP Coordinating Council. The council is given duties to provide for the coordination of programs and services among the regions; to adopt standards for establishing and approving quality, effective professional development programs; to conduct long‑range planning with regard to the professional development needs of the state; to adopt common definitions, protocols and reporting requirements for the purpose of conducting statewide evaluations of the program; and to contract for administrative services to assist the council to be paid proportionately from the region’s budget.
Mr. Sturm:
The next change would strengthen and clarify the role of the regional governing boards. This provides that the governing boards created by Senate Bill 555 of the Seventieth Session have the ability to appoint the RPDP coordinator and allow a portion of their time to be paid from the RPDP budget.
SENATE BILL 555 OF THE SEVENTIETH SESSION: Makes appropriation to state distributive school account. (BDR 34-1782)
Mr. Sturm:
Section 10 of amendment number 1160 to S.B. 148 specifies that each governing board will have budget review responsibilities with regard to its budget. The governing board will oversee the program’s evaluation components and be responsible for long-term and short-term planning within its region.
The next change in the amendment is to Section 17, which adjusts the amounts to be transferred from the DSA to align with approved amounts by the subcommittee in closing this budget account. The subcommittee approved $4,695,530 in FY 2002 and $5,500,775 in FY 2003 for the continued operation of the regional training programs.
Section 18 of amendment number 1160 revises the bill to authorize the Legislative Bureau of Education Accountability and Program Evaluation to contract for a consultant to conduct the evaluation of the RPDP.
Under accountability, I would like to clarify a number of provisions concerning the proficiency examination pursuant to NRS 389.015, and standards-based examinations pursuant to NRS 389.550.
SENATE BILL 466 OF THE SEVENTIETH SESSION: Revises provisions governing education. (BDR 34-1247)
Mr. Sturm:
First is a proposal that revises the provisions of S.B. 466 of the Seventieth Session to delay implementation of the new science portion of the high school proficiency test for 2 years. This change would require that seniors graduating in the 2004‑2005 school year must pass the science test to receive a standard diploma versus students due to graduate during the 2002-2003 school year, as indicated under current law.
Ms. Braun:
I would like to discuss the next section to this amendment, which would add Section 3 and provides for the norm-referenced testing be administered at grades 4, 7, and 10 instead of grades 4, 8, and 10. This amendment is proposed in the event that funding is provided by the Legislature for 8th grade criterion‑referenced examination. Instead of having 8th grade students take two state examinations per year, the Terra Nova or norm-referenced examination would be given to 7th grade students, and the 8th grade students, would take the criterion-referenced examination. This would take effect in the second year of the biennium when the new contract for the norm-referenced examination is effective.
The next portion of the amendment would add Section 4 and amends NRS 389.015 to require the High School Proficiency Examination (HSPE) to be developed, printed, administered, and scored by a nationally recognized testing company.
Section 5 provides the date for “one-shot” funding for the development of any new criterion-referenced testing funded during the 2001 legislative session, as well as provides for a pilot administration of the new examination. The proposed amendment would provide that this new examination be developed or purchased by December 1, 2002, piloted in the Spring of 2002, and administered to all pupils for whom it is required in the spring semester of 2003.
The final portion of the amendment would add Section 6. It provides language to authorize LCB staff to participate in the process for the review and selection of a testing vendor. In addition, this amendment requires that any contract the department enters into with a testing vendor include a provision that allows the testing vendor to respond to requests for information from the LCB.
Chairman Raggio:
If these amendments are adopted, would this reflect all of the required appropriations and reflect the subcommittee’s closing action?
Ms. Braun:
It would, Mr. Chairman.
Senator Rawson:
This bill originally had a section in it that dealt with foreign teacher licensure. Does that provision remain in this bill?
Mr. Sturm:
Yes, that provision remains in Section 21 dealing in particular subject areas where there is a shortage of teachers.
Chairman Raggio:
Does Washoe County have a position or objection on any of these proposed amendments?
Dotty L. Merrill, Lobbyist, Washoe County School District
We are very supportive of these amendments. Every interest group I know will be satisfied and pleased with these amendments.
Dr. Merrill:
My request deals with this bill relative to A.B. 319.
ASSEMBLY BILL 319: Makes various changes to provisions governing education. (BDR 34-784)
Dr. Merrill:
Assemblyman Lynn C. Hettrick, Douglas County Assembly District No. 39 and Carson City, inserted language into A.B. 319 in Sections 25 and 26 of amendment number 1160, which deals with threats made to students or employees of school districts, charter schools, and private schools. These are threats that are not otherwise covered in law because the threats are made through electronic communications. This is important language for all school districts.
Mr. Hettrick made this proposal on the basis of an incident that recently occurred in the Douglas County School District. We strongly suggest that Sections 25 and 26 of A.B. 319 be added to S.B. 148.
Chairman Raggio:
In the event of violation, does the proposal provide for sanctions or punishment?
Dr. Merrill:
Yes, it provides that the violation will be a misdemeanor or gross misdemeanor.
Senator Rawson:
The Senate Committee on Human Resources and Facilities has processed a measure we call the “Bully” bill.
SENATE BILL 115: Revises provisions governing suspension and expulsion of pupils. (BDR 34-381)
Senator Rawson:
This bill started out as a complex bill with many more provisions than anticipated. Does S.B. 148 contain any of the language of the “Bully” bill? Also, did you read all of the proposed amendments for S.B. 148? Is there any language that you are proposing in S.B. 148 that you did not read?
Dr. Merrill:
No, there is not.
Chairman Raggio:
Dr. Merrill, is your concern that, if A.B. 319 is not processed, you would like to have Section 25 of that bill contained in the bill we are currently considering, which is S.B. 148?
Dr. Merrill:
Yes, that is language dealing with a person, who by use of oral, written or electronic communication, knowingly threatens to cause bodily harm or death to a pupil or employee of a school district or charter school with the intent to: intimidate, frighten, alarm or distress a pupil or employee of a school district or charter school; cause panic or civil unrest; or interfere with the operation of a public school, including, without limitation, a charter school. We would like that language included in S.B. 148 covering this violation in any school, whether it be charter, public or private.
Douglas Byington, Lobbyist, Nevada Association of School Administrators:
We have been working with Washoe County School District on this bill and we concur with the amendments.
Chairman Raggio:
Committee, if there is no objection, I would take a motion to amend S.B. 148 with the proposed amendment, including an added amendment dealing with threats involving electronic transmissions as discussed in Section 25 of A.B. 319.
SENATOR RAWSON MOVED TO AMEND AND DO PASS AS AMENDED SENATE BILL 148 WITH AMENDMENT NUMBER 1160, INCLUDING LANGUAGE DEALING WITH THREATS OR USE OF THREATS TO A PUPIL OR EMPLOYEE OF A SCHOOL DISTRICT OR CHARTER AND PRIVATE SCHOOL BY MEANS OF ORAL, WRITTEN OR ELECTRONIC COMMUNICATION.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
I thank committee staff for their diligent work on this measure. Each of you met everyone’s concerns and came up with more than an acceptable resolution. As ever, your work is appreciated.
SENATE BILL 583: Establishes grant program for development of projects relating to tourism. (BDR 18-1562)
Chairman Raggio:
The Commission on Tourism requests the authority to use revenue to set up a fund from amounts in excess of the reserve that was established from room tax in the Commission on Tourism budget. Our concern is that the reserve not be depleted. Also, we are concerned this not be an “open ended” authority because there are needs that are met from that revenue that remain after budgeting. What was the amount of the reserve from the testimony that we determined should be maintained in that account?
Mr. Ghiggeri:
The Commission on Tourism indicated they would like to maintain a reserve of $1.1 million. When the budget was closed, there was about $500,000 remaining in excess of the $1.1 million, based upon revised projections on the growth of the room tax revenue.
Chairman Raggio:
The commission’s request was for about $1.1 million reserve. However, there needs to be a cap on the spending authority if we do approve this measure.
Nancy A. Dunn, Interim Executive Director and Business Manager, Commission on Tourism:
There is a point of clarification regarding missing language in this bill. What is missing is that the funding for this program would require legislative authorization. We planned to establish this “fund” in its own category within the Commission on Tourism’s budget account, having it proceed through the legislative budget process to be funded every biennium.
Chairman Raggio:
How would that be attained in this session?
Ms. Dunn:
If we received the authorization to create the category, and if there is excess funding available in reserve, we would then come to the IFC and apply for funding for the program for this biennium.
Senator Rawson:
I have a note this was an 8.8 percent authorization with no appropriation. Is that correct?
Ms. Dunn:
The 8.8 percent was a calculation completed by the Fiscal Analysis Division of the LCB. They projected that to be the increase over the last fiscal year for lodging tax revenues.
Chairman Raggio:
If this committee chooses to adopt this new program, the chairman suggests we add the proposed language and initially cap the fund at $200,000. I am also leaning toward requiring the Commission on Tourism to submit a request to the IFC for approval of these amounts. What is the committee’s pleasure?
SENATOR JACOBSEN MOVED TO AMEND AND DO PASS AS AMENDED SENATE BILL 583, INCLUDING LANGUAGE TO AUTHORIZE ABOVE THE MINIMUM RESERVE AN AMOUNT AVAILABLE NOT TO EXCEED $200,000, SUBJECT TO APPROVAL OF THE INTERIM FINANCE COMMITTEE.
SENATOR COFFIN SECONDED THE MOTION.
Senator Rawson:
Could we place a sunset clause in this motion or look at this again the next session?
Chairman Raggio:
Let us leave it as is and monitor how the Commission on Tourism deals with this over the biennium.
Senator Jacobsen:
This is a benefit to the rural communities.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
I will be recessing to reconvene at the call of the Chair. Also, I would like to appoint Senator Rawson and Senator Coffin to meet with the chairman and a like committee from the Assembly Committee on Ways and Means regarding the bill dealing with unclassified salaries.
Senator O’Donnell:
Is there an opportunity to discuss S.B. 391?
SENATE BILL 391: Creates Western Interstate Commission for Higher Education scholarship trust fund (BDR 34-282)
Senator O’Donnell:
I have proposed language to S.B. 391 in Section 1, subsection 3 to strike “mental health and nursing positions” and increase the teaching slots to 10 per year. Additionally, I recommend including the words, “out-of-state” as an institution, in Section 2 of the bill.
Chairman Raggio:
Would this be in addition to the action we took on closing the budget for Western Interstate Commission for Higher Education (W.I.C.H.E.)?
Senator O’Donnell:
Yes, Mr. Chairman, this would augment the closing of that budget account. I can submit my amendment to committee staff.
Chairman Raggio:
What appropriation is involved?
Senator O’Donnell:
It involves $25,000 in the first year and $50,000 in the second year of the biennium.
Senator Mathews:
I have concerns that we have shortfalls in both teachers and nurses. I would not want to see nursing slots reduced.
Senator Rawson:
As a point of clarification, we closed the W.I.C.H.E. budget including nursing positions.
Senator O’Donnell:
I do not mind keeping nursing slots in the language of this bill. We need both of those professions, but we do not have an idea as to whether we will receive applications for nurses or teachers. If we do not receive enough applications, there may be slots kept open only because we did not have the correct slots for the appropriate applicant. I would not oppose keeping the nursing slots in the bill as an “either-or” situation.
Chairman Raggio:
Would you make the motion then?
SENATOR O’DONNELL MOVED TO AMEND AND DO PASS SENATE BILL 391, INCLUDING LANGUAGE SUSTAINING THE NURSING AND TEACHING POSITIONS, WITHOUT LIMITING THE NUMBER OF EITHER WITHIN THE TOTAL OF TEN POSITIONS.
SENATOR MATHEWS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio recessed to the call of the Chairman at 9:57 a.m. and reconvened the hearing at 6:00 p.m.
DEPARTMENT OF EDUCATION
Distributive School Account – Budget Page K12ED-11 (Volume 1)
Budget Account 101-2610
Chairman Raggio:
The first matter on the agenda is the subcommittee’s recommendations on the Distributive School Account (DSA). Committee staff will go through the handout distributed to us entitled, “Distributive School Account” (Exhibit G).
The subcommittee report and the action on the DSA is dependent on the passage of two bills that are now in the Assembly. One is S.B. 577 and the other is A.B. 460.
SENATE BILL 577: Limits common-law and statutory liability of corporate stockholders, directors and officers and increases fees for filing certain documents with secretary of state. (BDR 7-1547)
ASSEMBLY BILL 460: Creates legislative committee on transportation and revises provisions governing fees collected by short-term lessors of passenger cars. (BDR 17-589)
Georgia J. Rohrs, Program Analyst, Fiscal Analysis Division, Legislative counsel Bureau:
I call your attention to an update to the DSA (Exhibit G, page 4), in which adjustments are inserted for the committee’s reference.
The first issue is local school district salaries, for which the subcommittee recommends a 2 percent cost of living adjustment (COLA) in FY 2003 for local school district employees. The funding for this raise is dependent on revenue from Business Transaction Fees and Rental Car Fee Rebate Reversion, assuming those bills pass.
The next issue is school district utility costs, for which the subcommittee recommends correcting the calculation of utility costs to include inflation adjustments for the increases in square footage, increasing the funding available for school districts by $2,123,049 over the biennium.
The effect of the increase in COLA and utilities would be reflected in the guaranteed per pupil basic support, which is increased to $3,897 for FY 2002 and $3,991 for FY 2003.
Special education was recommended for closure based on the projected enrollment growth of the general student population. Class Size Reduction was also based on general enrollment growth. There were no increases recommended by the subcommittee in either of those two programs.
Chairman Raggio:
The handout indicates the Elko Class Size Reduction program was discontinued in this account?
Ms. Rohrs:
Yes, that is correct, but there is revenue for that program, but not in this account. The “class size reduction” bill continues the demonstration program as authorized by the 1999 Legislature. There is also a bill that will extend it to include grade 6.
Regarding the Adult High School Diploma Program, the subcommittee recommends adoption of the funding formula changes with a sunset clause of June 30, 2003. The subcommittee also recommends a Letter of Intent directing the Department of Education to maintain the current level of programs in both prison programming and school district programming, and to provide a written report to the 2003 Legislature.
In school improvement programs, the subcommittee recommended budget reductions set forth on page 1 (Exhibit G).
On funding issues, the subcommittee approved offsetting the Local School Sales Tax revenue shortfall of $2,875,887 for FY 2001 with estate tax collections as a one-time adjustment.
Regarding interest income, the subcommittee recommends increasing the revenue from interest on the Permanent School Fund by $1.25 million per year to $4,994,428 per year.
Regarding property tax, the subcommittee recommends reducing the 25 cents portion of the projected increase in assessed valuation from 7.3 percent to 6.44 percent to reflect the current projection by the Department of Taxation.
Regarding estate taxes, the subcommittee recommended offsetting the FY 2001 shortfall of $2,875,887 in sales tax collections with estate tax as a one-time expense.
Lastly, the business transaction fees (S.B. 577) are expected to generate $29 million over the next biennium. The Rental Car Fee Rebate Reversion (A.B. 460) is expected to generate $23.5 million in revenues. In my handout, I have itemized other items that, if passed, these bills are expected to fund (Exhibit G, page 2).
Chairman Raggio:
Committee, the action would be to close the DSA. The other items will be reflected otherwise. I will take a motion to close the DSA based on the recommendations of the joint subcommittee.
SENATOR RAWSON MOVED TO CLOSE BUDGET ACCOUNT 101-2610 PURSUANT TO THE RECOMMENDATIONS OF THE SUBCOMMITTEE, INCLUDING ADOPTING THE FUNDING FORMULA CHANGES WITH THE INCLUSION OF A SUNSET CLAUSE OF JUNE 30, 2003, REGARDING THE ADULT HIGH SCHOOL DIPLOMA PROGRAM; INCLUDING A LETTER OF INTENT DIRECTING THE DEPARTMENT OF EDUCATION TO MAINTAIN THE CURRENT LEVEL OF PROGRAMS IN BOTH PRISON PROGRAMMING AND SCHOOL DISTRICT PROGRAMMING AND TO PROVIDE A WRITTEN REPORT TO THE 2003 LEGISLATURE; INCLUDING INCREASING THE PERMANENT SCHOOL FUND BY $1.25 MILLION PER YEAR, INCLUDING REDUCING THE 25 CENT PORTION OF THE PROJECTED INCREASE IN ASSESSED VALUATION FROM 7.3 PERCENT TO 6.44 PERCENT; INCLUDING OFFSETTING THE FY 2001 SHORTFALL IN SALES TAX COLLECTIONS WITH ESTATE TAX AS A ONE-TIME EXPENSE.
SENATOR MATHEWS SECONDED THE MOTION.
Senator Neal:
Could you explain the “net proceeds tax advance” and the “net change in the biennium appropriation requirement of $120,743,306?”
Ms. Rohrs:
The former was a one-time funding, which was due to a change in the accounting method. It is not carried forward in the budget. The latter is the difference between the total funding requested in this biennium compared to both years in the upcoming biennium.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio
Committee, let us look at the subcommittee recommendations on the Capital Improvement Program (CIP).
Rick Combs, Program Analyst, Fiscal Analysis Division, Legislative counsel Bureau:
Mr. Chairman, I have distributed a handout entitled, “Subcommittee Recommendation 2001-03 Capital Improvement Program” (Exhibit H). I will start on page 5, explaining to the committee how the program is being funded and what the totals are.
The total program recommended by the subcommittee is $293,689,091. The Governor had recommended $306,502,316. The General Funds were recommended by the Governor at $18 million and later revised to $16 million based on the Economic Forum’s revised projections. The subcommittee reduced it further to $14 million.
The general obligation bonds that will be issued to fund the program total $196,490,014. The Governor recommended the reallocations from previous CIPs at $3 million. The State Public Works Board was unable to find $3 million, so that has been reduced to $2,202,333.
The State Highway Funds to support the program increase slightly to $1,598,090; the university-donated funds are recommended by the subcommittee at $33,949,306; the federal funds are recommended by the subcommittee at $7,110,310; Department of Employment Training and Rehabilitation funds are recommended by the subcommittee totaling $4 million.
The next item is entitled “Bonds not paid from ad valorem tax,” which totals $29,338,566. These bonds will not be repaid out of the ad valorem tax, but from other revenue sources.
Lastly, there is $5 million in funding from the Special Higher Education Capital Construction Fund. All of this totals $293,689,091.
Chairman Raggio:
Committee, those of you who were not members of the joint subcommittee, as we go down the handout, please do not hesitate to question any matter of concern to you.
Senator Neal:
What is the item entitled, “Insurance Settlement Proceeds, which has a “zero figure?”
Mr. Combs:
Please turn to page 2 (Exhibit H) and look at project 01-C28, which is for a shop facility at the Nevada State Prison that was damaged by a twister. The department was going to pay for the new shop with insurance settlement proceeds. The Department of Prisons came to the IFC and requested authorization for those funds. Their request was approved, so it is not necessary to include it in the Capital Improvement Program.
The first project on page 1 (Exhibit H) is 01-C1, which is phase III of the High Desert State Prison. The subcommittee increased “other funds” by $1,762,382. That is a federal grant that we have used a number of times to fund prison construction projects and it is available for the next biennium.
Chairman Raggio:
Were we able to reduce general obligation bonding by that amount?
Mr. Combs:
That is correct, Mr. Chairman.
Another project is 01-C3, which is the project to purchase a building in Carson City and a building in Las Vegas formerly occupied by the Employers Insurance Company of Nevada (EICON). The Governor had expressed his opinion that the building in Las Vegas could be deleted and the subcommittee chose not to purchase the building in Las Vegas. However, the subcommittee recommended purchase of the building owned by EICON in Carson City. That reduced the funding for this project from $16,240,000 to $5,542,245.
Senator Neal:
Why would the state be purchasing that building? EICON is not considered a state agency, so why would we be purchasing from them? I thought we had privatized that?
Mr. Combs:
They own that building, Senator, and have it on the market. So, we are purchasing it from them to house state employees.
Chairman Neal:
But we gave EICON $2 million when the Legislature approved privatization, so why should we have to pay for the purchase of this building?
Mr. Combs:
They have ownership of that building.
Chairman Raggio:
If you will remember, Senator Neal, EICON ended up with certain assets and these were assets that they acquired and have retained, this building in Carson City being one of them.
Mr. Combs:
In project 01-C7, there was $300,000 in general obligation bond funding recommended by the Governor that has been removed. That was based on the subcommittee’s recommendation to replace that funding with a loan from the General Fund that will be repaid. The $300,000 is merely a “float” to allow the design to proceed and then the federal government reimburses the state for any costs incurred. The subcommittee felt it would be better to fund it in this manner, rather than tying up those general obligation bonds.
Project 01-C13 is a project to convert a warehouse at the Belrose property in Las Vegas for the Southern Nevada Record Center. That project was eliminated because of testimony that indicated the warehouse property would only suit the state’s needs for 2 to 3 years. After that construction of a larger facility would be required. There was also a concern that the funding for the project would not be sufficient to provide for proper fire suppression, and there was no funding for shelving. As a result, the governor submitted a letter recommending that it not be approved, which the subcommittee adopted.
One of the projects that was recommended to be re-allocated was a 1999 project for advanced planning of a new records center for southern Nevada. Based on the subcommittee’s action not to approve project 01-C13, committee staff did not re‑allocate those funds. I advised the State Public Works Board that, if there is some reason they would not be continuing with the advance planning of that project, they would need to apply to IFC as a “change of scope.”
The next project is 01-C21L, which is a project to build a new Health Science and Biotech Building on the West Charleston Campus of the Community College of Southern Nevada (CCSN). The Governor recommended $20 million in general obligation bonds and $5 million in donations from university sources. During the process, the CCSN indicated they were going to reduce the amount they could raise in donations from $5 million to $1 million. Based on that, as well as other considerations, the subcommittee voted to reduce the funding for the project just to allow for advance planning through plan checking for this project. That came to approximately $1.4 million.
Senator Coffin:
I want to take the committee back to project 01-C4, which is the new location for the State Motor Pool in Las Vegas on the University of Nevada, Las Vegas, (UNLV) campus. We have had several discussions on this issue and new information has been obtained as a result of conversations in these meetings. Yesterday, I received information from the State Public Works Board that there was a need to move out of the current building.
However, we have discovered today in a letter received from the manager of the Business and Commercial Development of the McCarran International Airport indicating that the State Motor Pool can stay in its present location until 2004. The question is, do we need this project as this time. Senator Rawson mentioned a recommendation to place the new State Motor Pool facility at an old school site. UNLV has a 30-year lease on that land, which is currently being utilized by the UNLV Law School. We may be at a juncture in which the State Motor Pool should consider another location for its new site.
This project may be unnecessary as opposed to other necessary projects at UNLV or other campus locations. This project is simply premature. It was not well thought out. Management did not consider the options available and the campus was quick to jump at what they saw as a chance to get a building. However, this building, if constructed, will block future construction as growth at the campus increases. I ask this committee to hold this project.
Chairman Raggio:
I am looking at the letter you referenced, which states, “they [State Motor Pool] would have to move in the first quarter of 2004.”
Senator Coffin:
That is correct, Mr. Chairman. However, the agency had testified they had to move in 2002.
Chairman Raggio:
The question is, even if they have to move in the first quarter of 2004, will they not have to have someplace ready for their occupancy during the interim while their new facility is being constructed?
Senator Coffin:
The testimony from the State Motor Pool was that they needed about 1 year to move. In other words, if the 2003 legislative session were to approve this project, then they would have time to move in the 15 months prior to expiration of their lease.
This project recommends building this new facility near the Thomas and Mack Center in an area of potential growth for UNLV. It is up to the Board of Regents what they desire to construct; however, the state is imposing itself on the UNLV administration to build this facility at this location. I believe there are other available options.
Chairman Raggio:
That was the southwest corner of the UNLV campus around the parking lot of Thomas and Mack. The bill would contain language, under the proposal this committee is considering, that the State Public Works Board would have to obtain IFC approval for any change in location of the proposed site for the State Motor Pool facility. The State Public Works Board does not need to get approval if it remains at the same location that was described in the joint subcommittee meetings. The question is what does this committee do.
Senator Coffin:
There are numerous projects UNLV was considering. Is it proper for the state to place this $3 million project containing state vehicles on UNLV campus, when the facility is not academically related? This project was not well thought out and now we find out that the State Motor Pool has more than a year longer than they originally thought before they need to vacate their current facility.
Chairman Raggio:
The only concern would be what happens if we do not approve this? Does the State Motor Pool stay where it is without any construction project? Where do we leave this agency at the end of the biennium?
Senator O’Donnell:
The committee might want to consider placing the $3 million with IFC. There are several locations around the state that are located near, or owned by, the Nevada Department of Transportation, such as land and easements under freeways. Investigation might reveal a suitable site for this proposed project located closer to McCarran International Airport. If we place the funding with IFC, we can allow the State Motor Pool to come back to IFC and apply for it once it finds a suitable location.
I agree with Senator Coffin. The two entities and purposes (UNLV/Education and the State Motor Pool facility) are incongruent and diametrically opposed.
Senator Coffin:
I like your suggestion, Senator O’Donnell. Another matter is UNLV will have to add parking spots to make up for the parking this project would take away. That loss is about 120 to 130 parking spaces. I would like this committee to consider holding this and following the suggestion of Senator O’Donnell.
Senator Neal:
What can we do about this issue now?
Chairman Raggio:
If we approve this project, we could place language in that would accommodate these suggestions. The suggestion is that it not be authorized until IFC approves the construction site for this new facility. The committee can change the language that is proposed by the subcommittee and say “before the State Motor Pool commences this project they must obtain approval from IFC as to the site. That includes any site, including the one that is currently proposed.”
SENATOR NEAL MOVED TO APPROVE PROJECT NUMBER 01-C4, REQUIRING THE STATE MOTOR POOL TO OBTAIN PRIOR APPROVAL REGARDING THE FACILITY SITE FROM THE INTERIM FINANCE COMMITTEE BEFORE COMMENCING THIS PROJECT.
SENATOR O’DONNELL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Mr. Ghiggeri:
The Assembly Committee on Ways and Means closed this today, with the language of the CIP bill only indicating that any change in location would necessitate the State Public Works Board coming back to IFC.
Chairman Raggio:
Because the bill has to go to print, we will have to quickly notify them of the change in the language this committee is recommending.
Mr. Combs:
The next project is 01-C23, in which the subcommittee added funding for asbestos abatement as part of the renovation and addition to Wright Hall. Funding for the asbestos abatement was not included in the recommendation from the Governor.
I need to point out in project 01-C25 there is a different figure that appears on this handout than that which appeared on the handout for the subcommittee. After the site was changed, $2.6 million was reduced from the project costs because of lower utility costs. The handout presented to the subcommittee indicated $14.4 million in general obligation bonds. The correct figure is exhibited on this handout at $13.4 million.
Project 01-C29L is a new project added by the subcommittee, which is a replacement for the project that was reduced for the Community College of Southern Nevada that was discussed earlier (01-C21L). This is a telecommunications building for the Community College of Southern Nevada at the Cheyenne Campus in Las Vegas. It is to be funded with $19 million in general obligation bonds and $1 million from donated funds. This was a project that was on the Board of Regents’ priority list.
The next project is 01-C30L, which is being termed the “transitional bridge” building on the UNLV campus. It is estimated to cost $5 million. As I understand it, this is a building that will join the current engineering building located near the Howard R. Hughes College of Engineering with the Juanita Greer White Life Sciences (White Hall) building. It will be used as a transitional space while the University is completing construction on the science and engineering complex, as well as a temporary location for the UNLV Dental School.
Senator Neal:
Did I understand you to say the committee is approving $5 million to construct this building for people to reside until they construct the new building?
Mr. Combs:
Yes, Senator Neal, that is correct. However, it is not that this building will be torn down after completion of the other construction. UNLV is in constant need of space on that campus and it will eventually be put to classroom use by another department.
Project 01-C31L is the planning and site preparation for the Dental School at UNLV. The subcommittee approved $1 million in general obligation bond funding.
Project 01-32L is funding in the amount of $1 million for the Medical School’s Dental Residency Program. This is an expansion of current office space and clinical space at the current location.
I will go through a few changes recommended by the subcommittee regarding maintenance projects. Project 01-M5 represents a significant increase recommended by the subcommittee in improvements to the Clear Creek facility requested by the Division of Buildings and Grounds. Part of this increase is because funds included in other projects for Clear Creek were transferred into this project so they would be combined. It also slightly reduced the total cost of the project when funded in separate projects.
Secondly, there was funding from the Americans with Disabilities Act (ADA) that was not included in the original project cost estimate, as well as paving costs that were supposed to be included, but were inadvertently left out and have been included in the recommended funding by the subcommittee.
The next maintenance project I would like to mention is 01-M20, which is to replace door hardware at the Southern Nevada Adult Mental Health Services buildings. The subcommittee reduced the amount of this funding from $316,819 to $274,385 based on costs being duplicative of costs included in a “one-shot” appropriation this session.
The next project is 01-M43, which is a project to repair gates at housing units at the Southern Desert Correctional Center. This was a project that had been approved last session, but the funds were used for another matter in phase II in the construction of High Desert State Prison. The Department of Prisons approached the subcommittee and it was determined that motors on the housing unit wing gates did not have to be replaced, and there was sufficient funding left in the 1999 project to complete this project.
Project 01-M46L was a project that was requested last Thursday (May 31, 2001). As the committee is aware, there has been a problem with mold at the Southern Nevada Child and Adolescent Services campus. Three buildings have been evacuated and they found problems with other buildings on that campus. The Division of Child and Family Services requested $1,590,446, and the subcommittee voted to have subcommittee staff work with that agency to confirm that figure. I have done so and cannot guarantee this is going to be an accurate estimate. However, based on the time constraints, it appears this is a reasonable figure. It would be funded through General Obligations Bonds pursuant to the subcommittee’s recommendation.
One statewide project is 01-S8, which is energy retrofit project. There are zeros across the spreadsheet because these projects are funded through the savings the agencies receive on their utility bills. Therefore, there are no state funds required for the program.
The other significant differences between the statewide and maintenance projects are primarily due to projects being combined and reducing costs slightly by doing that. That is why in some projects reflecting zeros across the spreadsheet, the projects have actually been combined with other, larger projects.
At your direction, Mr. Chairman, I would like to cover items approved by the subcommittee that will be included in the CIP bill. The first project included the energy retrofit program. That was a recommendation to increase the current cap from $5 million to $15 million for these projects.
Chairman Raggio:
Senator Neal, we heard that bill in the Senate Committee on Government Affairs and the committee discussed increasing that authority, now at $5 million. We settled on increasing it to $15 million. That is the amount available for the energy retrofit program.
Mr. Combs:
That is correct, Mr. Chairman. It is important for this committee to keep track of this because, according to LCB Legal Division, it is subject to the 2 percent constitutional debt limit, although it is not going to be paid out of the 15-cent tax rate. Therefore, it is important for this committee to be involved in setting the authority for the program.
The bill will also include a provision that authorizes the State Board of Finance to issue the general obligation bonds as necessary based on the schedule for construction of projects. The Governor recommended giving them the flexibility to avoid issuing bonds and then not using the funds for 2 years until the construction was ready to proceed.
There will be requirements for repayments for all of the Department of Information Technology projects. Repayments must also be made to the Bond Interest and Redemption Account for the State Printing Division projects. Also, the State Motor Pool project (01-C4) would also be repaid for the State Motor Pool’s portion of the cost of that facility. That facility will be shared by UNLV and the State Motor Pool. The state requirement for operating costs is roughly 47 percent, and that is the way the cost for the repayment of the bonds would be split.
Senator O’Donnell:
Does that have impact on our previous action regarding the State Motor Pool?
Mr. Combs:
As I understand the previous motion, it was to require the State Motor Pool to receive approval of the site of the new facility. Regardless of where the site is located, the State Motor Pool would be required to pay for its portion of the costs of the facility.
Senator O’Donnell:
That also means UNLV would have to pay for its portion?
Mr. Combs:
As recommended by the Governor and approved by the subcommittee, the state would be funding UNLV’s portion, as it does on most of the University of Nevada and Community College projects.
In project 01-C9, which is the Special Children’s Clinic Addition, there will be a provision that allows the Health Division to use a portion of the revenue from the 1999 CIP for advanced planning of the Special Children’s Clinic remodel.
The authorized expenditure of $4 million from the Department of Employment Training and Rehabilitation (DETR) accounts for project 01-E1 is for a new office building for DETR. There will also be authorized issuance of $4.2 million in general obligation bonds for that project. These will be subject to the 2 percent debt limit because part of the manner they are repaying these bonds is through their savings on rent payments. They cannot be considered revenue bonds if rent savings is being used to pay the debt. It goes against the 2 percent debt limit, but it will not go against the 15-cent tax rate. This is a short-term bond at 5 years, so that is how long it would affect the 2 percent limit.
Mr. Combs:
Projects to rehabilitate the state’s fish hatcheries also authorizes the issuance of up to $3.5 million in general obligation bonds. These have been termed revenue bonds as well because A.B. 199 increased the trout stamp fee from $5 to $10.
ASSEMBLY BILL 199: Revises provisions governing certain accounts, licenses and stamps administered by division of wildlife of state department of conservation and natural resources. (BDR 45-529)
Mr. Combs:
That is the funding that will be used to pay for this project. Although we will term them “obligation bonds” in the bill, because that will help the agency get a lower interest rate, it will not be subject to the 2 percent debt limit because the agency will be protecting a natural resource, and there is a constitutional provision that allows for those to not go against the 2 percent limit.
According to the subcommittee’s action, there will be a provision prohibiting the State Public Works Board from executing a construction contract for a project by the University and Community College System of Nevada (UCCSN) for which there are donations that are supposed to be received. This will prohibit the State Public Works Board from executing a construction contract until those donations are provided to the State Public Works Board.
There will be a provision that authorizes the State Controller to advance the $300,000 for the Veterans’ Cemetery project. Then there will be a provision to authorize UCCSN to issue $110.5 million in revenue bonds for University of Nevada, Reno (UNR) projects and $106.5 million for UNLV projects. S.B. 496 increased those revenue bond levels for university system facilities.
SENATE BILL 496: Authorizes issuance of revenue bonds to finance certain buildings at Great Basin College. (BDR S-1226)
Mr. Combs:
This CIP is also needed to increase the revenue bond authority for UNR for the $22 million portion of the new UNR library, which is project 01-C24. Because those two changes need to be made to the same section of NRS, we are concerned about the conflict issues that may cause a problem. By combining the increase in the same bill, we avoid that conflict situation. That is why the figures are higher than the committee might expect. The authority will be amended out of S.B. 496. The only provision remaining in that bill will be the Great Basin College’s request for authority to issue revenue bonds.
The remaining section of the 2001-2003 CIP bill will be related to the reallocations from previous CIP programs to fund this program, as well as extension of reversion dates on a few 1997 projects that have a few outstanding issues.
Chairman Raggio:
Are there any comments or questions on the subcommittee report on CIPs for the biennium? If not, the motion should be to adopt the subcommittee recommendation with the exception of project 01-C4, for which the bonding authority will be withheld pending prior approval of the IFC as to the site location.
SENATOR O’DONNELL MOVED TO APPROVE THE SUBCOMMITTEE’S RECOMMENDATION ON THE CAPITAL IMPROVEMENT PROGRAM, WITH THE EXCEPTION OF PROJECT 01-C4, FOR WHICH REVENUE SHALL BE WITHHELD PENDING PRIOR APPROVAL OF THE INTERIM FINANCE COMMITTEE AS TO SITE LOCATION.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio:
Committee, let us look at S.B. 574.
SENATE BILL 574: Transfers responsibility for administering program for property tax assistance for senior citizens from department of taxation to aging services division of department of human resources. (BDR 38-1552)
Chairman Raggio:
Look at S.B. 574, Amendment 1170 recommended by the Assembly Committee on Ways and Means. Specifically on page 4, line 38 you will see where the reprint of the bill was correct to reflect “8.5 percent.” Evidently there was an error in the last reprint. I will take a motion to concur.
SENATOR RAWSON MOVED TO CONCUR IN AMENDMENT NO. 1170 TO SENATE BILL 574.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Senator Rawson:
I would like to report that the first conference team did reach an agreement in S.B. 555.
SENATE BILL 555: Makes various changes in general laws governing cities. (BDR 21-352)
Senator Rawson:
Assembly Bill 612 is a $500,000 “one-shot” appropriation for the revolving loan plan for certain rural health programs. I prepared an amendment, which is prepared in two ways. The first amendment takes the authorizing language from S.B. 403 and places it in this bill without any further appropriation. The second amendment also takes the authorization language from S.B. 403, the same language in this bill regarding the $70,000 grant to the Nevada Rural Health Centers, Inc., clinic in Carlin.
ASSEMBLY BILL 612: Makes various changes concerning rural health. (BDR 31‑421)
SENATE BILL 403: Enacts Frontier and Rural Health Care Improvement Act of 2001. (BDR S-942)
Chairman Raggio:
What is the committee’s pleasure?
Mr. Ghiggeri:
Senator Neal brought up a point this morning that the language should be changed to “loan” instead of a “grant.” There are two sections in that bill where it refers to “grant” instead of a “loan.”
Senator Rawson:
There is one section of A.B. 612 that clearly defined this as a “loan.” The confusion came from the second section that referred to it as a “grant.”
Chairman Raggio:
If this committee is going to amend the bill, we might as well erase any potential confusion. I will take a motion to amend and do pass A.B. 612 with the proposed language. That establishes within the University of Nevada School of Medicine, the Nevada Office of Rural Health an amendment as proposed and the appropriation for $70,000 to the Nevada Rural Health Centers, Inc., for its clinic in Carlin.
SENATOR RAWSON MOVED TO AMEND AND DO PASS THE FIRST REPRINT OF ASSEMBLY BILL 612, INCLUDING AMENDING LANGUAGE TRACKING THAT AS A LOAN AND NOT A GRANT AND INCLUDING AN APPROPRIATION OF $70,000 TO THE NEVADA RURAL HEALTH CENTERS, INC., FOR THE CARLIN CLINIC.
SENATOR NEAL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Raggio adjourned the hearing at 6:52 p.m.
RESPECTFULLY SUBMITTED:
ElizaBeth Root
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: